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[whitespace] Anna Eshoo Eschewing Reform: Anna Eshoo sides with tech execs who want to keep stock option expenses off the books.


Public Eye

Fast Money

In a stunning example of bad timing, the usually-adroit Rep. ANNA ESHOO took a leadership role earlier this month by opposing the movement to reform the corporate accounting shenanigans that have left so many tech investors high and dry. In a guest editorial published in the San Francisco Chronicle on July 3, the five-term Palo Alto Democrat took shots at a key proposal--expensing stock options--which has the backing of fiscal luminaries like Fed chairman ALAN GREENSPAN, billionaire investor WARREN BUFFET, former SEC chairman ARTHUR LEVITT, and Sens. CARL LEVIN (D-Mich.) and JOHN MCCAIN (R-Ariz.). Eshoo's op-ed parroted talking points of the anti-reform forces, including their favorite argument that deducting stock options from corporate earnings would screw employees because stingy CEOs would no longer dole them out to anyone but themselves. Never mind that many financial insiders say current practices inflate corporate earnings and hurt investors down the line when those earnings evaporate (stop Eye if this is starting to sound familiar). But Eshoo, siding with tech executives who have fought long and hard to keep these expenses off the books, says corporations should be able to continue to deduct stock options from their income taxes but not from the earnings they report to the public. She also reiterated the industry line that since there is no accurate way to place a value on options, they shouldn't be counted at all. But embarrassment came a few days later when two leading companies, Coca-Cola and the Washington Post Co., announced they would voluntarily start deducting stock options as a way to more accurately reflect the financial performance of their firms and to regain investor confidence. What's more, both companies added that there would be no reduction in the number of stock options granted to employees and that they had no problem placing a value on the options. ... A fired-up Eshoo told Eye Tuesday that she's still a champion of the downtrodden. "I don't hold the view that expensing stock options is going to cure the abuses," she said, adding that she's as sure as ever that employees will take it in the shorts if the accounting gets changed, not CEO's. The Congresswoman brushed off suggestions that she was siding with the fatcats. "I'm an investor who's lost my shirt, my retirement," she protests. (Eye notes the average annual pension for members of Congress is more than $50K a year.) "I've been on this issue for a long time," she assured Eye. "I'm not doing this for applause."

Bob Livengood
Bob Livengood

Planks for the Memories

Milpitas City Manager BOB WILSON's five bosses won't make him walk the plank--for now--but his luck may run out if this fall's election tips the balance. Wilson emerged from his April evaluation by the council with his job intact, but with councilmembers capping on him in a recent closed session meeting. "There's a very strong undercurrent from some councilmembers that it's time to move on with somebody else," confides Councilman BOB LIVENGOOD, Wilson's most vocal critic. Wilson, whose $173,664 salary tops the paycheck of Gov. GRAY DAVIS, started at City Mall two years ago. Since then, Livengood says, construction of a new City Hall "has turned into a fiscal disaster as he was at the helm of the ship." In addition, Livengood adds, Wilson has stumbled in "very contentious labor negotiations ... that took us months past the expiration of the contracts" and on a plan to sue Calpine over a power plant outside city limits and that "turned into a complete flop, which was his doing as well." As Livengood sings Wilson's praises, it looks like the council has given Wilson a chance to turn things around. "The council has been actively reviewing the performance of the city manager and working with him in those areas that the council has felt need improvement," adds Councilman JIM LAWSON. Milpitas Mayor HENRY MANAYAN emails: "I have confidence in the city manager's ability to effectively administer the business of the city of Milpitas. And since this matter is now concluded, one can deduce that a majority of the City Council feels the same." Deducing will have to do, because Mallpitas Councilmembers TRISH DIXON and JOSE ESTEVES were both too shy to return Eye's polite phone messages. Reached at home after dodging Eye's calls, Wilson said he didn't want to talk about it. If the council does cut Wilson loose, it won't be his first time. Wilson's two previous stints as a city manager--in Oceanside, Calif., and Tucson, Ariz.--both ended with resignation requests from councilmembers.

Eye for News

Eye was saddened to hear that SAM VESTAL, who was a legendary news photographer long before the term "photojournalist" was coined, passed away on July 8. He spent most of his 70 years shooting for the Watsonville Register-Pajaronian, where he started at age 19. After a stint in the Army and traveling around Europe in the early '50s shooting for Stars and Stripes, Vestal returned home to score one of the paper's biggest scoops in 1955. For months, papers from around the region had been following a story about Santa Cruz County District Attorney CHARLES MOORE's ties to RAYMOND JEHL, who ran an illegal gambling ring. Late one night, accompanied by a reporter, Vestal photographed Moore's blue Pontiac in Jehl's driveway. Jehl himself emerged and held Vestal at gunpoint while another man destroyed the camera. Sheriff's deputies showed up and arrested the two newsmen for trespassing. Vestal, however, had slipped the film holders to his reporter, and after the R-P's editor bailed the pair out, the paper ran the three photos on the next day's front page. Moore later resigned, and Jehl went to prison. Sam's photos helped the paper win the 1956 public service Pulitzer Prize for courageous exposure of corruption in public office. After that, Sam covered the Monterey-Santa Cruz area for UPI and shot for national magazines, but he stayed in Watsonville, where the paper gave him complete freedom and control over his work. "He told me he'd rather be a big frog in a small pond," says JOE SWAN, who knew Vestal for decades and ran the photojournalism department at San Jose State University for 25 years. Sam's daughter, KBAY radio DJ KIM VESTAL, says her dad turned down those opportunities because he loved Watsonville and wanted to raise his family there. "He was a news photographer, morning, news and night. He'd come home every day with a big stack of papers and just read the news," she remembers. Sam always had a camera with him, Kim says, even photographing his daughters with his Rollei the day before he died at the Palo Alto VA hospital. "The last pictures he took were of me and my sister," Kim says.

Sam's work will be on display July 20 from 2 to 5pm at the Pajaro Valley Historical Association, 332 E. Beach St., Watsonville.


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From the July 18-24, 2002 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

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